Question of the Week: “Is President Obama going to get what he wants from the U.S. Congress in order to avoid the ‘Fiscal Cliff?’ Why or why not?”

Photo and question by Yvonne Kemp

Dr. Mark A. Allen, Sr.: “I believe the president will be successful in moving past the Republican standoff and push his agenda forward because they need to gain the support and respect of all Americans. God has a plan for our president and he will see it through.”

Roberta Walker: “Yes. I think the Republicans will work with the president this year. Due to seeing figures on paper and hoping to improve our country in its debt and a second chance to improve jobs and schooling and medical needs in our country and not in countries across the waters. I also think the president will be more demanding in getting things improved.”

Jai Strawbridge: “I feel that President Obama will not get all that he has proposed, but there will be a compromise. The impact is too devastating for the House of Representatives to be the ones who brought the country down, without sitting at the table and begin a process to help the working class of America.”

Pastor Robert Angel: “What will determine the Republicans giving President Obama what he wants will be the desires of their constituency. I believe factors like disposable income, GNP and GDP will be huge determinants. If those factors adversely affect corporate profits, there may be the level of cooperation that the president desires.”

Obama and small business owners already off to a bad start in his second term?

by C. Daniel Baker

President Obama met with 13 CEOs of major corporations yesterday to talk about the fiscal cliff. CEO’s from a vast range of companies were in attendance including Wal-Mart, Honeywell, and Proctor and Gamble.

This meeting was part of the “The Campaign to Fix the Debt,” a group founded by former Fiscal Commission chairs Alan Simpson and Erskine Bowles.

There were no representatives of small business invited to this roundtable discussion that took place in the Roosevelt Room of the White House.

“What happened today at the White House is an insult to the business owners who create two-thirds of net new jobs,” said Dan Danner, President and CEO of the National Federation of Independent Business. “Make no mistake, today’s discussion between the president and Fortune 500 CEOs was about raising rates on small business owners, not on the people in the room.”

Lobbyists for small businesses worry that the CEO’s in attendance might sell out smaller business. They feel many of the corporate leaders are recommending policies that protect big companies while leaving smaller ones exposed to huge tax increases. Some even feel that the companies in attendance are “tax dodgers” because several companies use intricate loopholes to avoid paying taxes. None of the companies pay the standard 35 percent corporate tax rate, and some reportedly pay as little as 5 percent, according to The Daily Caller.

“It’s disappointing that he only meets with a segment of the business economy,” said Dirk Van Dongen, president of the National Association of Wholesaler-Distributors.

Van Dongen is part of a coalition of smaller businesses and trade associations that disagree with Obama’s effort to repeal the George W. Bush-era tax cuts for high-income Americans. Many small businesses are organized as “flow through” entities where profits are passed through to owners, then taxed at individual income tax rates. Those rates would rise under President Obama’s plan.

Chris Whitcomb, Tax Counsel at the National Federation of Independent Business said, “We are concerned that the White House is not thinking about the broader business community.”

An administration official said the White House disputes the lobbyists’ claims and has plans to meet with small-business leaders in the future.

Rev. Al Sharpton joined the roundtable on Meet the Press on Sunday to discuss the “fiscal cliff,” and the anticipated second term agenda for President Barack Obama.

Sharpton, along with fellow guests MSNBC anchor and senior Washington correspondent Andrea Mitchell, New York Times columnist David Brooks, documentary filmmaker Ken Burns and former Hewlett Packard CEO Carly Fiorina discussed what Americans can expect in a second Obama term, and in upcoming fiscal cliff negotiations.

Sharpton said there is no question “we are gonna have to deal with the question of where the tax rates go,” and noted that during a meeting the president held with progressive leaders including himself, Obama pledged to uphold his campaign pledge to raise taxes on the rich. After that, Sharpton said the priorities of jobs and unemployment “will be dealt with.”

Brooks said that if the U.S. can prove that it is “governable” in the coming months, “we have the potential to be the hotspot of the world,” noting that Europe, the Middle East and other regions around the globe are stagnating.

Burns, who said he recently emerged from “witness protection, along with Big Bird,” joking about the threats to cut PBS by the Republican presidential candidate, Mitt Romney, said that people understand that the pain of budget cuts will be felt by everyone.

And Mitchell added that the president will need to show a different brand of leadership in the second term than he did in the first.

The roundtable was joined by Honeywell CEO David Cote, who concurred with Brooks on the idea that the U.S. needs to prove it is “governable,” in order for business leaders to invest.

And the group discussed the leadership lessons to be learned from the movie, “Lincoln,” and the ongoing role race plays in our politics.

The “fiscal cliff” is to personal finance what Kryptonite is to Superman.

Indeed, in today’s post-election world, if your stock portfolio has one weakness, one vulnerability, one negative financial field force that is sapping it of its normal strength, it is the long list of dangers related to the nation’s well-publicized fiscal woes.

They carry the threat of recession and the potential for higher tax rates on stock profits and dividends. And that is putting investors’ finances in a weakened state — just as Kryptonite does to Superman.

The fiscal cliff is the one-two punch of tax hikes and deep, mandated spending cuts set to kick in automatically on Jan. 1 unless a divided Congress can agree on a deal to avoid, or at least minimize, the damage that the roughly $600 billion fiscal drag would inflict on the economy.

Fear that Democrats and Republicans won’t get a deal done by year-end — when the investor-friendly Bush-era tax cuts will otherwise expire — has already resulted in a sizable hit to investors’ stock portfolios. In the eight trading days since Election Day, a vote which resulted in a status quo political power structure and more divided government, the Standard & Poor’s 500 stock index has fallen 4.8%.

A report of some progress and an improved tone of cooperation gave stocks a lift Friday, avoiding another down day. But some investors fear a market meltdown similar to the one that occurred in the summer of 2011, when a divided Congress brawled publicly over raising the nation’s debt ceiling. The partisan bickering dragged on so long that it resulted in a credit-rating downgrade for the USA’s triple-A rating, the first in history, a blow that dented investor confidence and resulted in a one-day plunge of nearly 635 points, or 5.6%, for the Dow Jones industrial average on Aug. 8, 2011.

The direction of the market is one thing, but among other problems, arguably the biggest headache facing investors is how to protect their portfolios from a potential hike in tax rates on capital gains and dividends.

If lawmakers let the Bush-era tax cuts expire at year-end, investors will see the tax rate on capital gains, or profits from stock appreciation, rise to 20% from 15%. And for individuals with income of $200,000 ($250,000 for households), an additional 3.8% investment income tax will be tacked on starting Jan. 1 to help defer the costs of President Obama’s health care law. That means high-income folks will see their capital gains rate rise to 23.8%.